In today’s briefing:
- Ashimori Industry (3526 JP): Murakami Outlines His Case
- Pacific Industrial (7250 JP): Effissimo Rears Its Head
- LS Cable – To Issue an EB Worth 400 Billion Won Using LS Marine Solution as Base Asset?
- Kangji Medical (9997 HK): Precondition Satisfied for the Light Scheme Offer
- PC Partner (1263 HK): Thoughts On The HKEx Delisting
- Johns Lyng (JLG AU): 8th October Vote On PEP’s Offer
- Johns Lyng (JLG AU): Scheme Vote on 8 October
- BMPS–Mediobanca: Sweetener + Waiver Tighten the Spread
- 2025 High Conviction: QFIN US – Event-Driven: Regulatory Overhang Sets Up 100%+ Upside Post-Clarity
Ashimori Industry (3526 JP): Murakami Outlines His Case
- Takateru Murakami, Yoshiaki Murakami’s son, has increased his Ashimori Industry (3526 JP) to an 18.36% ownership ratio at an average buy-in price of JPY4,154.28 vs. the JPY4,140 tender offer.
- Crucially, in today’s disclosure, Takateru Murakami outlines the rationale for his stake building, which centres on the book value being materially understated if certain land were revalued at market rates.
- Maintaining current terms is increasingly not a viable option. Toyoda Gosei (7282 JP) is likely to pursue a strategy of either increasing its offer or lowering the minimum acceptance condition.
Pacific Industrial (7250 JP): Effissimo Rears Its Head
- Effissimo reported a 5.87% ownership ratio in Pacific Industrial (7250 JP). The average buy-in price of JPY2,235.91 per share is 9.1% above the JPY2,050 MBO offer.
- Effissimo buying significantly above terms is justifiable as the offer implied a P/B of 0.71x. Effissimo is agitating for either a bump or an opportunity to participate in the back-end.
- With the offer closing on 8 September and shares trading 16.9% above terms, the Ogawas have little choice but to revise terms.
LS Cable – To Issue an EB Worth 400 Billion Won Using LS Marine Solution as Base Asset?
- Major major local media including Maekyung Business Daily and Chosun Daily have reported that LS Cable & System is pushing forward with an EB worth 400 billion won.
- The target stock to be used in the EB is LS Cable’s shares in its subsidiary LS Marine Solution.
- LS Marine Solution is one of the largest marine engineering companies in Korea, specializing in the installation and maintenance of submarine cables, offshore wind infrastructure, and marine energy systems.
Kangji Medical (9997 HK): Precondition Satisfied for the Light Scheme Offer
- The precondition for Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK)’s scheme privatisation from a consortium is satisfied. The offer, which has been declared final, is at HK$9.25 per share.
- The key condition will be approval by at least 75% disinterested shareholders (<10% of all disinterested shareholders rejection). Crucially, the blocking stake is below the substantial disclosure threshold.
- Despite the recent derating of peers, the vote risk remains medium-to-high due to a solid interim, the imminent surgical robot growth story, unfavourable AGM voting patterns, and emerging retail opposition.
PC Partner (1263 HK): Thoughts On The HKEx Delisting
- On the 15th November 2024, personal computer parts and accessories play PC Partner (1263 HK)‘s secondary listing, by way of introduction, was effected.
- The SGX also granted in-principle approval for the conversion of its secondary listing status to a primary listing. This dual-listing status (SGX + HKEx) took effect on the 20th August.
- In tandem with a SGX free float waiver, PCP will now seek a HKEx delisting. This listing/delisting construct is to ensure the uninterrupted supply of NVIDIAs GPUs.
Johns Lyng (JLG AU): 8th October Vote On PEP’s Offer
- On the 11th July, PEP offered A$4/share for integrated building services provider Johns Lyng (JLG AU), a 77% premium to undisturbed. CEO Scott Didier, JLG’s largest shareholder (17.62%), was supportive.
- Pricing is okay. The absence of a final year fully franked dividend, which was teased at the onset, was ostensibly disappointing.
- The Scheme Booklet is now out, with a Scheme Meeting on the 8th October, and expected implementation on or before the 23rd October. The IE (Kroll) says “fair & reasonable“.
Johns Lyng (JLG AU): Scheme Vote on 8 October
- The Johns Lyng (JLG AU) IE considers PEP’s A$4.00 offer fair and reasonable as it is within its A$3.72-4.42 valuation range.
- The offer requires regulatory (FIRB and US) and shareholder approvals. The scheme vote should pass as no disinterested shareholder comes close to holding a blocking stake.
- The offer is reasonable as the timing of an earnings recovery is highly uncertain. At the last close and for a 23 October payment, the gross/annualised spread is 1.5%/11.0%.
BMPS–Mediobanca: Sweetener + Waiver Tighten the Spread
- BMPS raises terms to 2.533 BMPS shares plus €0.90 cash per Mediobanca share, waiving the two-thirds condition while retaining a 35% minimum—shifting sentiment to a modest, positive convergence setup.
- Timeline tight: board review this week; acceptance deadline 8 September; results and settlement mid-September unless terms change, which could trigger re-opening and push closing toward late September or early October.
- Best expression remains long Mediobanca, short 2.533× BMPS per share; a 1% BMPS move shifts implied consideration ~€0.19 (≈1% of MB), so maintain a disciplined hedge into catalysts and headlines.
2025 High Conviction: QFIN US – Event-Driven: Regulatory Overhang Sets Up 100%+ Upside Post-Clarity
- QFIN US is down 30% since July on fear that the Oct 1 regulatory action on 24%+ loans will lead to significant and sustained earnings downgrades.
- QFIN’s industry-leading franchise, risk management history, capital return yield (~18-20%), and strong balance sheet support a strong recovery post-regulatory clarity and cleanup.
- Valuation at 1.2x FY1 P/BV already discounts worst case; QFIN’s recovery potential leaves scope for 100%+ upside (peak valuation at 2.4x in Mar-24 pre-regulation).
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